BUSINESS
A wish-list for capital market regulation in 2023
Here’s a list of regulations and laws that need to be tightened/enforced/changed in 2023
BUSINESS
Corporate governance: Time to give greater say to aam aadmi shareholders
The western model of corporate governance is inappropriate for India’s ownership structure. A new approach is required that acknowledges India’s unique promoter-public shareholder ecosystem
BUSINESS
Buyback Norms: Welcome amendments but more needs to be done
Buybacks through stock markets have often been abused and their phasing out is welcome. But Sebi needs to incorporate more safeguards to ensure fair treatment to all
BUSINESS
SEBI's opinion on net worth calculation has a cascading effect
SEBI believes revaluation reserves should be included in net worth to determine applicability of corporate governance norms. This may not be legally sound, but has far-reaching ramifications in other areas
BUSINESS
Time to untangle regulatory knots for directors’ remuneration
Payment of remuneration to directors is subject to unduly complex provisions, largely a hangover of old laws and patchwork amendments. It becomes worse for listed companies and loss-making but growing startups
BUSINESS
Fininfluencers | Existing regulations enough to rein in fraudsters
For registered advisers, no further regulation is required. For those who are not registered, better enforcement will be a deterrent
BUSINESS
Of mules and foxes and securities laws violations
Use of front persons is extremely common in insider dealing, front running, frauds, etc. in securities markets. The question, however, is whether such front persons, aka mules, should be held liable in the same manner and extent as the mastermind who profits the most
BUSINESS
Directors’ disqualification on default is a remedy with severe side-effects
Well intended they may be but harsh company law provisions disqualify directors for five years if their company has incurred certain financial defaults. It’s no surprise that directors jump ship at such companies, worsening their problems
BUSINESS
SEBI’s move to expand material event reporting was due
Listed companies may have less flexibility on when to report material events. While this means more timely information for investors, they risk being overwhelmed by it
BUSINESS
Recommending governance changes in the shadow of NSE scam
The Expert Committee’s report on governance changes at MIIs recommends wide ranging changes, many of which are to prevent wrongs similar to those alleged in the NSE case. However, it keeps the biggest issue of conflict of roles of simultaneously being profit seeking entity and regulator by MIIs unaddressed
BUSINESS
SEBI ruling on liability of independent directors has far reaching implications
If independent directors are held liable and penalised without establishing knowledge, connivance, and negligence, it would be worrisome
BUSINESS
SEBI increasingly wielding its powers to act against misleading media
SEBI recently absolved a journalist of issuing a misleading news report that had price-sensitive implications. But it leaves open the door for prosecution if the intent was to manipulate share prices or influence investor actions
BUSINESS
Sebi’s new settlement scheme may buy peace but at what cost
The new scheme to settle manipulative options trading are pragmatic and more attractive to the offenders. But questions remain on the precedent it sets and how to make markets immune from future incidents
BUSINESS
Far reaching implications of Supreme Court’s ruling on educational institutions
The recent ruling will affect not just educational institutions but also hospitals of several categories, universities, etc. There will need to be a change in their activities and even constitution documents, lest they lose their tax-free status. Even if arguably overdue, this presents yet another challenge adding to earlier recent amendments to law and policy changes generally
BUSINESS
Are our securities laws enough to deal with accounting and financial frauds?
CG Power case raises questions whether the elaborate checks and balances of independent directors, auditors, Audit Committees, etc. can prevent a company from being stripped and shareholder wealth destroyed before it is too late
BUSINESS
Courts have repeatedly reminded SEBI about its limited powers against errant auditors
SEBI should stop flogging the dead horse of taking action for negligent auditing or even faulty audit reporting. It needs to focus on showing whether the auditors participated or abetted in the fraud
BUSINESS
Ban on Brickwork Ratings is harsh, questionable
Should not a lesser punitive step of debarment for a limited period be a better option?
BUSINESS
SC ruling limits broad sweep of insider trading
The Supreme Court recently held that the motivation of gain is a prerequisite to establish a case of deemed insider trading. While this may be good news, it barely makes a dent on the fortress of deeming fictions that can trap hapless insiders
BUSINESS
SEBI drops WhatsApp insider trading case, but it needs to do more to stem the rot
A holistic and multi-disciplinary approach is needed to tackle the systemic rot of insider trading
BUSINESS
SEBI lays down a roadmap for Social Stock Exchanges
SEBI has developed a robust framework to enable match making between social/charitable organizations and philanthropists/, big and small, who are in search of such organizations. Using the existing and well developed infrastructure of stock exchanges, SEBI has ambitiously sought to create a transparent and well governed market place for philanthropy
BUSINESS
Blocking aberrant promoters from insolvent companies is a challenging task
The recent ownership battle in McDowell Holdings has revived debates on the strength or weaknesses of the IBC
BUSINESS
Secured creditors club in IBC no longer a closed one
A recent Supreme Court ruling that certain state government tax dues are secured has yet again jolted the foundation of the Insolvency and Bankruptcy Code
BUSINESS
The silver lining in the Supreme Court’s ruling on PMLA
The Supreme Court’s ruling on PMLA upholding it in most aspects has resulted in widespread protests. However, one aspect of it is positive and already showing good implications in practice. Coupled with another ruling of the Court and also a review petition being heard, one can hope that this near draconian law is tamed
BUSINESS
SC's Benami ruling opens door to toning down of draconian laws
The Supreme Court struck down retrospective provisions in amendments to Benami law. More importantly, principles laid down in the ruling have wider ramifications
